Current Events Impacting Industrial Development

industrial development

March 2022 marked two years since the WHO (World Health Organization) declared COVID-19 to be a global pandemic. Emotional and economic recovery has been slow. Supply chain issues continue to impact commercial and residential construction costs and timeframes. Even though real estate investors see industrial development as favorable (the need for space is higher than space available), those in the trenches say the lack of parts and raw materials is negatively impacting construction projects.

The Philadelphia Inquirer says the Ukraine war will do more in our country than raise oil prices. “Nothing influences people’s thinking about future inflation than what they are currently paying at the pump,” said Chief Economist Mark Zandi. As inflation perceptions escalate, the Federal Reserve will likely respond by raising interest rates more aggressively than predicted.

Industrial Development Between a Rock and a Hard Place?

The lack of industrial development materials prolongs the problem of not-enough industrial real estate development. The costs of construction materials like steel and concrete have rocketed upward while competition to win Federal construction project bids is heating up like …well, rocket fuel.

Meanwhile, giants like Amazon, with seemingly unlimited purchasing power and resources for building their own storage spaces, are adding fuel to the fire by stockpiling.

March 2022 lead-time estimates:

  • Dock levelers – 35-42 weeks
  • Dock seals – 30-40 weeks
  • Electrical switch gears – 50-50 weeks
  • Main electrical panels – 26-35 weeks
  • Overhead doors – 20-22 weeks

Construction Costs, Materials Issues

We’ll see continued efforts to update ports and speed-up customs and import inspection times. But supply chain issues aren’t completely international. North American-produced lumber and steel costs may be higher through 4Q2022. Pop-up storage may alleviate equipment and materials space problems.

Changes in design and materials substitutions keep some industrial development projects alive but other projects are being delayed or canceled. Meanwhile, when it comes to construction materials and prices, prepare for a new normal.

Speaking of normal: Data management and using information sources are now the way our industry operates and thrives. Find out why we think building permit information is an information source that pays for itself.

Call 435-586-1205 or contact Construction Monitor.

Construction Industry Feb Starts: We Get By With a Little Help From Our (Manufacturing) Friends

The total construction industry starts increased nine percent in February 2022. The new construction of three “large manufacturing facilities” boosted nonresidential building starts up 32%. Without the large manufacturing projects, total construction would have declined six percent in February, according to Construction Business Owner magazine.

The manufacturing facilities are:

  • $10 billion – Intel chip fabrication plants/Chandler, AZ
  • $1.5 million – Steel mill/Osceola, LA
  • $550 million – Intel semiconductor facility renovation/Rio Rancho, NM

Manufacturing may continue to drive construction industry business, but other sectors are facing challenges.

Other construction industry statistics for February 2022 include:

  • Nonbuilding construction – <1%
    • Highway/bridges – >2%
    • Misc. – <26%
    • Public works – <23%
    • Utility/gas plant starts – >66%
  • Nonresidential – >32%
    • Commercial – <8%
    • Institutional – <22%
  • Residential – <3%
    • Multifamily – >2%
      • $400 million – Central condos/St. Petersberg, FL
      • $220 million – Journal Squared apartments/Jersey City, NJ
      • $147 million – Miami World Tower/Miami, FL
    • Single-family – <4%

February 2022 was negatively influenced by weather and the war against Ukraine. The continued material and labor issues and expenses may be causing some construction industry business owners to put the brakes on project startups. They may be pausing just long enough to examine areas in which costs can be cut for better balance.

Data Continues To Drive Construction Operations, Marketing

Our construction industry is embracing digital transformation. Ninety-five percent of construction project site workers say they’d utilize technology-driven tools that would make their jobs easier. Software implementations have added efficiency and accuracy that saves time and money, so it’s an all-around win-win for companies investing in technology.

Construction Monitor data is used by project managers and construction industry business owners for project statistics and marketing leads. Our information helps: It tells you what your competitors and potential partners are developing. You can study historical trends so you can make informed decisions about future investments. All you need to do is use it. We’ll help with that too. Call 800.925.6085 (International/435.586.1205) or contact Construction Monitor.

Construction Industry Transformation with Offsite Manufacturing

construction industry

At this point in time, offsite manufacturing makes only a small contribution to most construction projects. Usually, less than 30% of a construction project utilizes prefabricated component construction because it’s a “new” process. The concept itself has been around a long time in North America. (Sears’ prefab homes were around $700 in 1895.)

Offsite manufacturing is called:

  • Construction-integrated manufacturing
  • Designed-for-manufacturing
  • Modular construction
  • Offsite construction
  • Panelization
  • Prefabrication
  • Volumetric modular construction

By any name, offsite manufacturing of construction components is transforming the construction industry. A survey among construction professionals revealed some of the views of and motivations for offsite manufacturing that included:

  • 57% less wasted materials
  • 54% improvement in scheduling
  • 50% faster field construction

Companies DIYing Modular Construction

Challenges facing electrical contractors today include low labor productivity
levels, low and fluctuating profit margins and frequent schedule
compressions.
The State of Practice of Prefabrication

Weather delays, tight deadlines, and the need for more flexible work hours have motivated some companies to create their own prefabrication sites. In fact, JM Electrical decided to grow its prefabrication and warehousing operations. This has led to plans to hire more workers and expand its apprenticeship program.

Inventory Management Necessary To Reap the Benefits of Modular Construction

An investment in technology to improve construction processes can pay off in better control of inventory management, one of the main challenges facing construction companies. Survey respondents said enhanced inventory visibility could drive prefabrication manufacturing decisions, leading to increased profitability.

Software solutions are separating the wannabes from the winners in the construction industry. Offsite prefabrication offers so many money- and time-saving incentives. All you need to do is make the leap toward better business using technology.

Construction Monitor took that leap more than 33 years ago when we created software that takes basic building permit information and customizes it. The “big data” is filtered for specific construction-industry companies and their regions, field of interest, desired level of growth, and more. The parameters (data sorts) you use are uniquely yours. What you need and want can change every week, monthly, quarterly, or annually because how you use our software analyses is up to you.

Questions? Call 800.925.6085 (International/435.586.1205) or contact Construction Monitor.

Construction Industry Facing National Skills Gap

Construction Industry

Do you know what “Hit them where they live” means? The definition is something that affects someone on a personal or intimate level. Many people – most people – only care about a problem if it hits them where they live. The construction industry is facing a serious labor shortage. And it’s hitting us where we live.

America’s Backbone Needs Bracing

It was once said manufacturing is the backbone of America. Considering some of the outsourcing issues we now face, that may no longer be true. We think construction is the backbone of America.

Construction personnel working here live, eat, sleep, and shop here. The problem is we don’t have enough qualified people in shipping and receiving. Or surveying, digging, operating forklifts, on the scaffolds, in the trenches, programming the software…

What You Can Do: Advocate

It’s time for construction industry business owners, managers, and anyone that wants a future in shaping America’s future to become a construction industry advocate. The most important qualification you need is a passion for what we do. “The first step to becoming an effective advocate is preparation. Know who to contact, when to act, and how to craft your message,” says the American Psychological Association.

Contact schools, colleges, and universities. Ask to join career fair days. Prepare a compelling presentation on the benefits of a career in the construction industry.

If you are able to communicate with state and national political representatives, do so. The development and future growth of your state can be driven by construction industry growth, and your state’s politicians are receptive.

Flagship Initiative for Construction Industry, Technical Careers

An example of how advocacy can become reality: In November 2021, South Carolina Gov. Henry McMaster announced a $17 million investment in Workforce Scholarships for the Future. This program will provide scholarships to cover tuition and fees at South Carolina technical colleges. He also requested the general assembly to approve $124 million to extend the program through 2024.

In addition to maintaining a 2.0 grade point average, students must:

  • Be employed
  • Complete a financial literacy course
  • Dedicate 100 hours volunteer time at nonprofit/public-service organization

Sharing information is one way to recruit potential personnel and grow your business. Using the information we share is another way to grow your business. Ask our marketing pros how it works. Contact Construction Monitor.

Construction Industry: Winning the 21st Century

Construction Industry

Construction industry contractors are ready to “hit the ground running” toward implementing the largest long-term investment in our country’s infrastructure in 100 years. But many construction professionals say it’s too soon to begin counting your money.

The historic Bipartisan Infrastructure Law will rebuild crumbling roads and bridges, replace lead pipes…and produce concrete results that change
people’s lives for the better. These results will create good-paying
union jobs, support domestic manufacturing and supply chains,
and position the United States to win the 21st century.
 –whitehouse.gov

7 Ways the Infrastructure Bill Impacts the Construction Industry

Some of the notable takeaways from a recent report on the infrastructure bill for construction industry developers were cited:

  1. Climate change – Roads and bridges will need to be more flood-resistant.
  2. Dam projects – More than 15,000 dams are identified as high-hazard-potential structures. That means their failure could result in loss of life and property damage. Of those, about 2,000 are urgently deficient.
  3. High-risk haste – Companies may promote unprepared employees into supervisory roles as they attempt to onboard as many new hires as possible. Fears over safety will be compromised as companies rush to recruit and train employees.
  4. Rising costs – Material costs and increased pay for labor will put increased strain on project budgets.
  5. Safety programs – Distracted drivers are driving faster. Sixty percent of highway contractors reported cars crashed into their work zones in 2021. The spending package has provisions to improve road building and road worker safety.
  6. Skilled wages – Skilled workers will become increasingly more valuable with the infrastructure spending package.
  7. Technology – “Technology is only an enabler,” said inventor Jane Chen. We need to learn how to make do with fewer workers, and one way is to eliminate unnecessary and repetitive tasks. Companies will continue to be encouraged to upskill workers and empower new hires and veteran construction workers to adopt technology. “Technology is skilling jobs, not killing them,” says Leica Geosystems.

Our data tells you who’s working on what. It also tells you where business-building opportunities await. Just ask us how, when, and where. Call 435-586-1205 or contact Construction Monitor.

Construction Industry Trends 2022

construction industry trends

Did you think the supply chain issues the construction industry faced in 2021 would magically resolve themselves this year? Some predict many of the materials we had difficulty acquiring last year will go forth and multiply, creating another construction industry issue: hoarding.

Contractors will pay more for materials and stockpile what they can get. Construction competitors will be divided among the haves or the have-nots.

Some of the construction industry trends predicted for 2022 are:

Continued supply chain backlogs

In January, international construction insurance CSO Doug Lyall reported more than 90 percent of builders said there were shortages of appliances and lumber, while 90% had shortages of plywood and 87 percent said they had shortages of windows and doors.

What’s the solution? Cultivate backup suppliers in North America. And instead of “hoarding,” which sounds bad, you may be applauded for “creating reserves.”

Cybercrime

In 2021, three-fourths of construction-related companies suffered a cyber incident. Look for cyber insurance premiums to increase 20% this year. Cyber insurance was once a luxury; it’s going to become a necessary reality.

Increased use of technology

Drones, bots, and self-driving vehicles will be technologies driving the construction industry this year. And continued software development and utilization will make project management more efficient than ever.

Materials alternatives

Alternative materials are looking much better than before. One of the reasons is, they are better. Cross-laminated lumber (mass timber) offers notable fire resistance. Concrete reinforced with fibers is sustainable, flexible, and more durable than traditional concrete.

On the downside, alternative materials cost more. You and your clients must do the math to determine if the investment is worth it.

Residential remodeling

Homeowners may spend $400 billion by 3Q2022 on home improvement projects. But rising costs – labor and materials – could hinder the growth of residential repairs and renovations.

Uncertainties management and business development

“The construction industry is well-positioned for 2022, but… Organizations that can plan their way around the uncertainties are better positioned to manage their risks and come out on top,” said Lyall.

Construction Monitor data analytics can take your company from hoping-it-all-works-out to making it happen. Learn how to use building permit information to build business in 2022. Contact Construction Monitor.

Construction Industry Economic Outlook

“They’re no longer lollygagging when it comes to committing to projects…” That’s one of the first economic indicators a Canadian construction CEO noticed in 2022. This year the construction industry will see a year of rebuilding, reorganizing, and recommitment to the future. Challenges and opportunities.

Construction Industry 2022

Pricing continues to be a shot in the dark as supply chain and materials remain unknowns. And then there’s COVID – whatever variant – causing jobsite stress and adding to the labor shortage. All that aside, you have to admit: It’s beginning to feel like “normal” again.

Ken Simonson of Associated General Contractors of America says he’s “nervously optimistic.” Materials lead times seem to be shortening and nonresidential construction is looking up. But vaccine hesitancy among construction industry employees means more downtime and greater severity of COVID’s symptoms for workers.

Inflation’s almost stunning rise might benefit the construction industry. It’s sad but true: As more people have difficulty paying their bills, more people will return to work. Pricing uncertainties are pressuring developers to sign contracts sooner, rather than later.

“People are starting to think that if they wait, they may miss the right opportunity to build their project,” said Deron Brown of PCL Construction.

The Three Ps of Construction

People, prices, and productivity will dominate the construction industry in 2022. U.S. manufacturing is returning home, as overseas manufacturing exacerbated an already problematic supply chain.

Another concern is hoarding by construction companies. The supply chain snafu and materials shortages led to a Depression-era mentality; many are buying what they can, as much as they can, and filling their warehouses “just in case.”

In 2016, a report was released on what people “really want” in residential construction. What people want will always drive commercial and residential construction, especially in 2022. What do you want to achieve this year? If it’s more like making history rather than watching others do it, you’ll need business-building processes. We’ve got some ideas for you.

Call 435-586-1205 or contact Construction Monitor.

Multifamily Construction in 2022

Multifamily Construction

The pandemic put most companies in jeopardy and almost every industry took a beating. Except multifamily real estate. Sometimes more is more: Rent and valuation growth are factors leading to increased multifamily construction development in 2022.

Multifamily Construction In-Demand

Economic situations led to almost double 1Q 2021 demand for rentals followed by record-high rent increases in 3Q 2021. It’s anticipated rent growth will be moderate in 2022 and rent control legislation will impact several areas of the country. For example, St. Paul, MN voted to cap rent increases at 3% annually. Rent control legislation is under review in other states, including:

  • Colorado
  • Florida
  • Illinois
  • Kentucky
  • Massachusetts
  • Nevada
  • Pennsylvania
  • Washington

…and more.

“Right now, the number of investors in the market far outpaces the number of (multifamily) properties for sale,” says business reporter Leslie Shaver. A leading apartment-owner organization that purchased 14 properties before 4Q 2021 was only able to complete one purchase in the fourth quarter. The lack of supply and increase in demand is pushing prices up, plus zoning restrictions further complicate multifamily construction development.

7 Trends In Multifamily Construction

Multifamily construction growth should remain stable, says buildcentral.com. Watch for these trends to impact how we build apartments and other multifamily housing projects:

  1. AI – Building contractors must utilize smart-home technology in security systems and “lifestyle efficiency.”
  2. Amenities – Competitive multifamily housing communities will have gyms, spas, pools, fiber internet, recycling facilities, and more.
  3. Competition – Look for Amazon and other warehousing/purchasing companies to aggressively compete for multifamily construction space.
  4. Multifunctionality – Smaller and more affordable housing must offer better, more technologically advanced usage solutions.
  5. Risks – Trade tariffs, supply chain disruptions, “and a dire shortage of qualified labor” will continue to plague our industry.
  6. Sustainability – LEED (Leadership in Energy and Environmental Design)-certified construction and “co-living,” in which renters utilize shared spaces will drive multifamily construction even more.
  7. Technology – Electric car charging stations and disruptive technology (rideshare apps, etc.) should be included in multifamily units.

You’ll make better construction industry-related business development and marketing decisions when you have the information you need. To learn more about construction developments in your city or town, contact Construction Monitor.

Building Our Industry: Small Awards Can Provide Huge Incentives

construction industry

Only 16.7% of Zoomers (Generation Z; those born between 1981-1996) have expressed interest in construction as a career path. Internships are one way to address our biggest workforce issue (no workforce). Plus, internships can reinforce our biggest draw: Becoming an apprentice in the construction trade means you can earn while you learn.

You don’t have to be a Fortune 500 industry leader or a state governor to create and award scholarships. Something to consider for 2022 and beyond is creating a brand scholarship for one or more high school seniors.

A brand scholarship is used by many organizations as an advertising tool. In a local, community-oriented setting, a small financial award is also good advertising, but in our situation, it’s a way to guide talent toward construction industry companies – like your company.

In 2021, South Carolina Governor Henry McMaster targeted $17 million for construction industry-related education. Workforce Scholarships for the Future offers scholarships that cover the cost of tuition and fees for students attending any trade school or technical college in the state. The scholarships are available to South Carolina adults and recent high school graduates. The scholarship requirements include:

  • Completing 100 hours of voluntary time to nonprofit/public-service organization or employment or taking one financial literacy course plus
  • Maintaining a 2.0-grade point average (GPA)

Construction-related scholarships could include:

  • Carpentry
  • CNC machining
  • Drywall
  • Electronics
  • Fabrication
  • Industrial/professional painting
  • Masonry
  • Pipefitting/welding
  • Plumbing
  • Robotic & electronic engineering technology
  • Robotic/laser welding
  • Roofing
  • Sheet metal machining
  • Welding/boilermaker training

…and more

In addition to construction careers, the South Carolina Workforce Scholarships can also be used for associate degrees and certification credentials for other in-demand careers:

  • Automotive technology
  • Biomedical
  • Computer science
  • Healthcare/EMT
  • Information technology
  • Iron/steel technology
  • Manufacturing
  • Medical
  • Transportation distribution/logistics

…and more.

Construction Dive Associate Editor Zachary Phillips said, “The demand for construction workers has escalated for decades, and it has gotten to the point where some contractors, subcontractors, and suppliers will hire just about anyone with a good attitude.”

A good attitude among employees is essential when growing a successful construction business. But we need educated, skilled workers that take pride in what they do. Education is key to building our workforce.

Education is also vital to building business. If you want to learn about the educational tools available to you as part of Construction Monitor’s weekly data analytics, call 435-586-1205 or contact Construction Monitor.

Is It Time for Construction Companies to Rethink Business Travel?

Rethink Business Travel

Business travel for construction companies has changed in 2020. We couldn’t hop on a flight or drop-in anywhere without masking, social distancing, vaccination-proving, and concerns. The pandemic will eventually be over but there are threats of other contagious diseases for 2022. Virtual meetings and Zooms – things we did because we had to in 2020 – may have been the clue it’s time to change many ways construction companies work.

We need to rethink how we conduct business travel.

Digitizing Travel Technology for Construction Companies

All construction professionals can’t work virtually. You might be able to 3D-design a project, but you can’t rig the scaffolding or inspect the drywall without using your hands.

Travel expenses are higher for most construction companies because you can’t plan for unpredictabilities. You pay more when you don’t have time to plan ahead. Without the luxury of advanced planning, “Airline fares are typically higher for (workers in the construction industry),” said one travel professional. Construction companies pay 20% more for business travel than other industries.

Construction travel involves entering information into spreadsheets plus travel expense tracking and reporting by auditors and accounting. The average is 13.6 hours per trip just to process and document travel. Digitizing business travel can save time and money.

How To Leverage Technology for Business Travel

Digitizing…means eliminating things like paperwork and manual data entry…using online platforms that modernize and automate travel processes to help you get the most out of the travel dollars you spend.Industry Dive

Yes, we’re singing the software song again. You can DIY (do-it-yourself) or retain an agency to manage it for you. Leveraging travel technology for construction companies should include:

  • Allowing managers to book for employees or employees to book for themselves, even from the field
  • Benchmarks
  • Data from customizable, real-time reports so you can negotiate greater savings with hotels/airlines
  • Detailed information about unused tickets/travel credits, etc.
  • Device-friendly/easy use and easy/efficient implementation
  • Measurable ROI (return on investment)
  • Powerful dashboards, analytics/reporting
  • Flag employees that need travel policy attention/training
  • Request-a-call option to connect with a travel agent without “hold” time
  • Risk-management tools
  • Visibility to see how many employees are traveling at any time
  • Vital information in one place: job costing based on travel cost reports

Our building permit software saves time and money by streamlining your marketing potential. Contact Construction Monitor.